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The federal government is in a period of profound transition and faces an array of challenges and opportunities to enhance performance, ensure accountability, and position the nation for the future. High-performing organizations have found that to successfully transform themselves, they must often fundamentally change their cultures so that they are more results-oriented, customer-focused, and collaborative in nature. To foster such cultures, these organizations recognize that an effective performance management system can be a strategic tool to drive internal change and achieve desired results. Based on previously issued reports on public sector organizations' approaches to reinforce individual accountability for results, GAO identified key practices that federal agencies can consider as they develop modern, effective, and credible performance management systems.

Public sector organizations both in the United States and abroad have implemented a selected, generally consistent set of key practices for effective performance management that collectively create a clear linkage--"line of sight"--between individual performance and organizational success. These key practices include the following. (1) Align individual performance expectations with organizational goals: An explicit alignment helps individuals see the connection between their daily activities and organizational goals; (2) Connect performance expectations to cross-cutting goals: Placing an emphasis on collaboration, interaction, and teamwork across organizational boundaries helps strengthen accountability for results; (3) Provide and routinely use performance information to track: organizational priorities. Individuals use performance information to manage during the year, identify performance gaps, and pinpoint improvement opportunities; (4) Require follow-up actions to address organizational priorities: By requiring and tracking follow-up actions on performance gaps, organizations underscore the importance of holding individuals accountable for making progress on their priorities; (5) Use competencies to provide a fuller assessment of performance: Competencies define the skills and supporting behaviors that individuals need to effectively contribute to organizational results; (6) Link pay to individual and organizational performance: Pay, incentive, and reward systems that link employee knowledge, skills, and contributions to organizational results are based on valid, reliable, and transparent performance management systems with adequate safeguards; (7) Make meaningful distinctions in performance: Effective performance management systems strive to provide candid and constructive feedback and the necessary objective information and documentation to reward top performers and deal with poor performers; (8) Involve employees and stakeholders to gain ownership of performance management systems: Early and direct involvement helps increase employees' and stakeholders' understanding and ownership of the system and belief in its fairness; and (9) Maintain continuity during transitions: Because cultural transformations take time, performance management systems reinforce accountability for change management and other organizational goals.